NYSE Can Be a Global Powerhouse: S&P

By Avi Salzman

S&P Capital IQ analyst Kenneth Leon upgraded NYSE Euronext (NYX) to Buy from Hold on expectations that the company will expand its geographic footprint and its product offerings in the coming years. The failed Deutsche Borse merger may have slowed the company’s plans down, but that doesn’t mean NYSE will change course or stop expanding, says Leon, whose price target is $28 per share (12% ahead of price when the report came out).

NYSE is also throwing off more than enough free cash to maintain a healthy dividend and probably grow it, Leon argues.

“The current share price offers close to a 5% dividend yield. We expect trading markets to improve going into 2013, which should bode well for NYX. Longer term, we see NYX transforming from a regional multi-line product focus to a multinational multiple product organization. With its acquisition of Euronext, and its equity investments and partnerships in Asia, we see NYX developing a leading global brand in equity and derivative product trading.”

Correction: An earlier version of this post attributed comments to the wrong S&P analyst.

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